Xiaomi’s Head of India Investment Shirley Mao: Opportunities, Growth, Timing, and Funding in India
Head of India Investment at Xiaomi Shirley Mao talked at Chinaccelerator 8X8 Event
This is an edited summary of an 8-min talk given by Shirley Mao, Head of India Investment at Xiaomi, during Chinaccelerator’s 8X8 Speakers Series event in September 2019. The views expressed by Shirley are her own and not related to Xiaomi Corporation.
You can check out the talk video here.
- India has 28 languages and many users are underserved;
- There are business opportunities in India but you need to be careful with your angle;
- Make brave decisions and you might see growth;
- It is always good to follow a trend rather than testing the market by yourself alone;
- Talk to the local people and you will find good timing.
Shirley’s India Journey
I’ve been based and investing in India for three years. India is getting hot and going global is a pretty popular topic now, so I want to open this talk by sharing how I started my journey in India.
Back in 2016 when I was working for an early-stage VC firm in China, I took my first trip to India as a girl alone. During later trips, I always landed at midnight and took Uber back home alone. I don’t want you to overly worry about safety. In fact, what is going to bother you are traffic jams.
Is India still a blue ocean?
The first topic I want to share is the opportunities.
If you decide to move overseas, like Southeast Asia, Latin America, or the largest emerging market — India, what are the opportunities? Is it still a blue ocean? Can you build something like WeChat in India? Or something big like a social network? The first thing to remember is that India is an open market:
- Google is there;
- YouTube has over 200 million users there;
- Facebook has been there for a long time.
Are there any opportunities left? The answer is yes, but it really depends on your angle.
In 2017, I invested in a company that grew its daily active users from 1 million to 15 million within one year. It is a local language version of Twitter in India. Back at that time, everyone was focusing on English speaking users in India, and the local language users were really underserved. India has over 28 different languages — not mere dialects or accents like in China. This company successfully scaled by understanding this.
How to achieve growth?
In some aspects, India can be even more sophisticated than China. Therefore, scaling can be very hard.
Let me use the same company as an example.
The company was founded in 2015 but that idea was their 17th project. In 2017, they made a brave decision to remove English as a language from their platform.
They had realized many users were not real English speakers, but only pretending to look well educated. Eventually, those users were not comfortable with reading and writing in English, which led to low engagement.
After the company removed the English language option, they saw a dramatic decline in users. But then, things started to turn around and grow fast.
This was a bold decision that turned out great. They had to have a strong heart to accept some decline and hope to see the light of growing back again.
Finding the Right Timing
Emerging markets can evolve fast due to government policy, optimization of the infrastructure and more. India’s transformation happened in 2016 when the government allowed free 4G data and Africa probably comes next year. It is always good to follow a trend and be part of it instead of just being alone and testing the market by yourself.
To find the right timing in a market, you need to go there, talk to local investors and startup founders, and build your own understanding.
Is it Easy to Fundraise in India?
Many people also asked me whether India is a good market to raise money or not. My advice is to realize emerging markets are not blank pages.
Not only hot but it is actually quite mature:
- The major funds, like Sequoia, are there; many USD funds are there.
- Some of them even have a longer history in India than in China.
- It’s a mature market where you can see both USD funds and INR (rupee) funds.
As a result, founders are able to raise series A, B, C there. After they grow locally, they might go to China or the US for later rounds.
US and Chinese investors are now more comfortable investing overseas. They also invest in many Indian startups, sometimes with higher valuations than in China. So overall, it’s a really hot market for the time being.
The Boom in Vernacular Content
As the company case Shirley shared in the talk, the diversity of India’s languages has been a critical issue for startups. And it’s not only about languages, but also the culture.
‘Startups need to build products for the local languages because the new generation of internet users in India is coming from areas where people speak neither Hindi nor English’.
That led to the fast growth of the vernacular content and social startups in India.
According to tech media Inc42, the estimated market size of vernacular content is $53 Bn. Over $708mln were raised by vernacular startups between 2014 and 2019, including ShareChat, DailyHunt, TikTok, Khabri and Vokal.
Saurabh, founder of Flickstree, a Mumbai-based digital video curation platform who just secured $3mln fundraising led by Samsung Venture Investment, addressed the importance of the “non-English markets”:
“The Internet is growing largely in non-English markets, so regional content definitely adds to our growth”, he said.
Note: Flickstree was also invested and accelerated by Chinaccelerator’s sister program MOX, which aims to enable startups to reach the next 4 billion mobile-first, mobile-only smartphone users in Southeast Asia and India.
But it’s not easy for vernacular startups to develop their products and features.
“The more languages, the harder it is to map audience taste and content serving. This is how our machine learning kicks in to recommend the right content to the right audience.”, Saurabh added.
Flickstree co-founders Saurabh Singh, Rahul Jain, and Nagender Sangra.
Are There Other opportunities in India?
Managing Director of Chinaccelerator and MOX William Bao Bean, who has invested in Asia for over 15 years, believes that: